FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended: September 30, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 33-31639
Finca Consulting, Inc.
(Exact name of registrant as specified in its Charter)
Colorado 84-1121635
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Koenigsallee 106, 40215 Duesseldorf, Germany
(Address of principal executive offices) (Zip Code)
(011-49-211) 384860
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to filed such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Not applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of September 30, 1993, 2,040,937 shares of Registrant's Common
Stock, $.01 par value, and 16,305 shares of Registrant's Convertible Preferred
Stock, $00001 par value, were issued and outstanding.
<PAGE>
Finca Consulting, Inc.
Index
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Part II OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission of Matters to a Vote
of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1
Finca Consulting, Inc. and Subsidiaries
Index to the Consolidated Financial Statements
September 30, 1993
Consolidated Balance Sheets.....................................................
Consolidated Statements of Operations...........................................
Consolidated Statements of Cash Flows...........................................
Notes to the Consolidated Financial Statements..................................
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<TABLE>
<CAPTION>
Finca Consulting, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
September December
30, 1993 31, 1992
----------- -----------
<S> <C> <C>
Assets
Current Assets
Cash ....................................................................... $ 386,541 $ 374,915
Marketable securities ...................................................... -- 37,480
Prepaid expenses ........................................................... -- 4,369
Stock subscription receivable .............................................. 687,372 --
Other current assets ....................................................... 4,005 86,188
Sales tax refunds receivable ............................................... -- 98,216
Receivable due from related parties ........................................ 598,482 59,529
----------- -----------
Total Current Assets .................................................. 1,676,400 660,697
----------- -----------
Property and Equipment, at cost
Land ....................................................................... 19,694 19,826
Buildings .................................................................. 83,994 84,560
Office furniture and equipment ............................................. 226,334 195,602
Motor vehicle .............................................................. 9,226 --
----------- -----------
339,248 299,988
Less: accumulated depreciation and amortization ............................ (125,710) (96,731)
----------- -----------
Net Property and Equipment ............................................ 213,538 203,257
----------- -----------
Other Assets
Deposits ................................................................... 57,857 58,354
Capital cost - office premium, net of accumulated amortization of $11,032
and $9,646, respectively ................................................... 15,966 17,534
Investment in Vintage Car .................................................. 150,906 226,226
Investment in real estate - Spain .......................................... 577,817 551,263
Goodwill, net of accumulated amortization of $1,335 and $538, respectively . 41,396 42,480
Other assets ............................................................... 154,404 50,617
----------- -----------
Total Other Assets .................................................... 998,346 946,474
----------- -----------
Total Assets .......................................................... 2,888,284 1,810,428
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses ...................................... 255,317 131,323
Customer credit balances ................................................... 1,017,450 176,783
----------- -----------
Total Current Liabilities ............................................. 1,272,767 308,106
----------- -----------
Minority interests in subsidiary ........................................... 45,632 45,632
----------- -----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Finca Consulting, Inc. and Subsidiaries
Consolidated Balance Sheets
(continued)
(Unaudited)
September December
30, 1993 31, 1992
----------- -----------
<S> <C> <C>
Stockholders' Equity
Common stock, $.01 par value, 20,000,000 shares authorized, 2,040,937 and
1,939,895 shares issued and outstanding, respectively ...................... 20,409 19,399
Preferred stock; $.00001 par value, 20,000,000 shares authorized, 16,305 and
16,305 shares issued and outstanding, respectively ......................... 1 1
Capital in excess of par value ............................................. 4,271,799 3,474,577
Accumulated deficit ........................................................ (2,608,536) (1,971,242)
Cumulative translation adjustment .......................................... (113,788) (66,045)
----------- -----------
Total Stockholders' Equity ............................................ 1,569,885 1,456,690
----------- -----------
Total Liabilities and Stockholders' Equity ............................ $ 2,888,284 $ 1,810,428
=========== ===========
</TABLE>
See notes to the consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
Finca Consulting, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------- ------------------------------
1993 1992 1993 1992
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales Commissions ...................... $ 4,604,241 $ 22,277 $ 10,976,255 $ 28,020
Cost of Shares and Options ............. 4,475,981 582,961 8,334,565 582,961
------------ ------------ ------------ ------------
Gross Profit ........................... 128,260 (560,684) 2,641,690 (554,941)
Operating Expenses
Selling, general and administrative . 247,407 1,010,153 3,264,192 1,250,606
------------ ------------ ------------ ------------
(Loss) From Operations ....... (119,147) (1,570,837) (622,502) (1,805,547)
------------ ------------ ------------ ------------
Other Income (Expense)
Interest income ..................... 25 2,282 423 12,488
Interest expense .................... (1,375) (5,849) (15,215) (5,849)
------------ ------------ ------------ ------------
Total Other Income (Expense) ... (1,350) (3,567) (14,792) 6,639
------------ ------------ ------------ ------------
Net (Loss) ............................. $ (120,497) $ (1,574,404) $ (637,294) $ (1,798,908)
============ ============ ============ ============
Net (Loss) Per Share ................... $ (16.94) $ (1.07) $ (3.20) $ (1.36)
============ ============ ============ ============
Weighted Average Number of
Common Shares Outstanding ............. 2,040,937 1,474,107 2,040,937 1,326,720
============ ============ ============ ============
</TABLE>
See notes to the consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
Finca Consulting, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
----------------------------
1993 1992
----------- -----------
<S> <C> <C>
Cash Flows From Operating Activities
Net (Loss) ........................................................ $ (637,294) $(1,798,908)
Adjustments to Reconcile Net Loss to Net Cash Provided by (Used in)
Operating Activities:
Depreciation and amortization .................................. 106,951 15,617
Minority interests in subsidiary ............................... -- 45,632
Decrease in marketable securities .............................. 37,480 --
Decrease in prepaid expenses ................................... 4,369 2,962
Decrease (increase) in other current assets .................... 180,399 (149,349)
Increase in receivable due from related parties ................ (538,953) --
Decrease (increase) in deposits ................................ 497 (36,595)
(Increase) in other assets ..................................... (103,787) (27,792)
Increase in accounts payable and accrued expenses .............. 123,994 153,643
Increase in customer credit balances ........................... 840,667 377,108
----------- -----------
Net Cash Provided by (Used in) Operating Activities .......... 14,323 (1,417,682)
----------- -----------
Cash Flows From Investing Activities
Purchase of property and equipment ................................ (39,260) (125,658)
Stock investment .................................................. -- 49,603
Investment in real estate - Spain ................................. (26,554) (481,042)
Investment in vintage car ......................................... -- (219,477)
----------- -----------
Net Cash (Used) in Investing Activities ...................... (65,814) (776,574)
----------- -----------
Cash Flows From Financing Activities
Proceeds from issuance of common stock ............................ 110,860 2,011,700
Stock offering costs .............................................. -- (132,000)
Additional capital contributions .................................. -- --
Proceeds from note payable to affiliate ........................... -- 283,066
Payment on note payable to affiliate .............................. -- (2,156)
----------- -----------
Net Cash Provided by Financing Activities .................... 110,860 2,160,610
----------- -----------
Effect on Exchange Rate Changes on Cash .............................. (47,743) 21,385
----------- -----------
Net Increase (Decrease) in Cash ...................................... 11,626 (12,261)
Cash at Beginning of the Period ...................................... 374,915 873,607
----------- -----------
Cash at the End of the Period ........................................ $ 386,541 $ 861,346
=========== ===========
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock .......................................... $ 687,372 $ --
=========== ===========
</TABLE>
See notes to the consolidated financial statements.
<PAGE>
Finca Consulting, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
(Unaudited)
BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
the three and nine month periods ended September 30, 1993 are not necessarily
indicative of the results that may be expected for the year ended December
31, 1993. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Registrant Company and
Subsidiaries' annual report on Form 10-K for the year ended December 31,
1992.
The balance sheet at December 31, 1992 has been derived from the audited
financial statements of that date but does not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements.
<PAGE>
Finca Consulting, Inc. and Subsidiaries
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Financial
Statements and notes thereto included in Item 1 above.
Results of Operations
Substantially all of the Company's revenues during the quarter and the nine
months ended September 30, 1993, were generated by its subsidiary,
Opti-Wert-Interest AG ("OWI-AG") through its retail securities brokerage
activities.
Revenues increased from $2,805,320 in the prior quarter to $4,604,241, an
increase of approximately 64%. Revenues for the nine months period ended
September 30, 1993, amounted to $10,976,255. Notwithstanding this substantial
increase in revenues, the Company suffered a net loss for the quarter of
$120,497 due principally to unfavorable price developments in the securities
markets, resulting in a significant increase in the Company's cost of the
equities and options purchased during the quarter, which totaled $4,475,981,
representing approximately 97% of revenues, and an approximate 36% increase in
such costs from the first two quarters of fiscal year 1993. The loss would have
been greater if not for savings achieved in general and administrative expenses.
Liquidity and Capital Resources
The Company had total assets as of September 30, 1993 of $2,888,284, of which
$1,676,400 were current assets. Working capital at the end of the quarter
totaled $403,633, including a cash position of $386,541. Management believes
that liquidity will remain sufficient to meet all anticipated cash needs.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1.Legal Proceedings.
There were no pending or threatened legal proceedings during this period.
ITEM 2.Changes In Securities.
Not Applicable.
ITEM 3.Defaults Upon Senior Securities.
Not Applicable.
ITEM 4.Submission of Matters to a Vote of Securities.
Not Applicable.
ITEM 5.Other Information
Not Applicable.
ITEM 6.Exhibits and Reports on Form 8-K
(a) (3)(i) Articles of Incorporation: incorporated by reference to the
Company's Form S-18 Registration Statement, filed with the Securities and
Exchange Commission on October 17, 1989, and declared effective on June 29,
1990.
(3)(i) Articles of Amendment to Articles of Incorporation: incorporated by
reference to the Exhibit to the Company's Form 10-K for the fiscal year ended
December 31, 1991 filed on June 4, 1992 with the Securities and Exchange
Commission.
(3)(ii) Bylaws:incorporated by reference to the Company's Form S- 18
Registration Statement, filed with the Securities and Exchange Commission on
October 17, 1989, and declared effective on June 29, 1990.
(21) Subsidiaries of the Company:
(i) Finca Consulting Costa Brava, S.A. - is a corporation formed under
the laws of the Country of Spain and is the name under which it conducts
business.
(ii) Finca Consulting, Limited - is a corporation formed under the laws
of the Country of the united Kingdom and is the name under which it conducts
business.
(iii) Finca Consulting, GmbH - is a corporation formed under the laws
of the Country of Germany and is the name under which it conducts business.
(iv) Opti-Wert-Interest AG - is a corporation formed under the laws of
the Country of Switzerland and conducts its retail securities and options
business in Germany.
(27) Financial Data Schedule
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the period covered by this
Form 10-Q.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
FINCA CONSULTING, INC.
(Registrant)
Date: December 20, 1997 By: /s/Volker Montag
----------------
Volker Montag, President
Principal Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF FINCA CONSULTING, INC. AND SUBSIDIARIES AT AND FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1993 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1993
<PERIOD-END> SEP-30-1993
<CASH> 386,541
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,676,400
<PP&E> 339,248
<DEPRECIATION> 125,710
<TOTAL-ASSETS> 2,888,284
<CURRENT-LIABILITIES> 1,272,767
<BONDS> 0
0
1
<COMMON> 20,409
<OTHER-SE> 1,549,475
<TOTAL-LIABILITY-AND-EQUITY> 2,888,284
<SALES> 0
<TOTAL-REVENUES> 10,976,255
<CGS> 0
<TOTAL-COSTS> 8,334,565
<OTHER-EXPENSES> 3,264,192
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,215
<INCOME-PRETAX> (622,502)
<INCOME-TAX> 0
<INCOME-CONTINUING> (622,502)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (637,294)
<EPS-PRIMARY> (3.20)
<EPS-DILUTED> (3.20)
</TABLE>
